The Association for Financial Markets in Europe saysthe tax would hamper economic growth, and the
financial services industry--already one of the largest
contributors of tax revenue-- "should not be seen as an
additional source of tax revenue but as an essential part of a
stable and sustainable economy."

2. Deals will take place off-market, where they aren't regulated

The Vienna bourse
says it has concerns that a transaction tax will
push market deals onto dark pools or the OTC market. "If
an EU-wide financial transaction tax is introduced then we ask
that it does not cover only securities but all financial
transactions, especially those which happen off-bourse."

Deutsche Boerse saysthe
tax's having its desired regulatory and financial impact is
doubtful because the recording of all financial transactions is
patchy now. And encouraging off-market transactions would not
change that: A financial transactions tax would
"incentivize shifting even more business into non-transparent,
unregulated financial centers and financial products worldwide,
distort competition and lead to regulatory arbitrage--to be
avoided as one of the lessons learned during the financial
crisis. Even if the tax covered a large geographic area, whether
it had the desired regulatory and financial impact can be
doubted, not least because the recording of all financial
transactions will likely remain patchy."

Traders would rush to those stock markets without such a
transaction tax, creating imbalances in liquidity and
volume,
says Minyanville.

3. Targeting the EU only would put it at a competitive
disadvantage

Norbert Barthle, Merkel's budget expert, says it
could be "difficult to implement" and would "make no sense on a
national level, so it must happen on a European
level." (Merkel and Sarkozy had failed to communicate
that the tax would be Euro-wide, and not just in the 17 Eurozone
countries, during a press conference yesterday.)

Ireland's finance minister Michael Noonan saysthe
tax should apply to all 27 counties in the EU: "One of
the key things we need to watch is that if some kind of
transaction tax comes in that it would apply to the whole 27
(European Union countries) rather than the 17 euro zone
countries."

Dutch Finance Minister De Jager saysit
should be global: "We are very much against
European taxes. We as the Dutch government have always pointed
out that such a (financial transaction) tax could be implemented
globally but if you don't do it (globally) ... there will be a
big distortion. People can very easily shift taxes to another
jurisdiction."

Minyanville
says It would not only put tens of thousands of people out of
jobs overnight in a fragile job market, it would greatly
reduce revenues for major exchanges.